IMA Chair Progression

June Perspectives Column - The Only Way Up

Strategic Finance is the award-winning flagship publication of the Institute of Management Accountants (IMA(R)), Montvale, NJ, www.imanet.org.

 

The Only Way Up

Sometimes we start walking toward a goal on a straight path that suddenly seems to twist and turn in unexpected directions, making us feel unsure and maybe lost. Nevertheless, we need to keep moving forward on our course.

By Frederick E. Schea, CMA, CFM, CPA

I get some of my best ideas when I’m away from work, doing something I love and that lets my mind roam. What’s been on my mind lately is the end of my year-long term as Chair of the

Institute

of

Management Accountants

(IMA®). During a tough backpacking trip last weekend, I had the opportunity to reflect on the year just past--and the ones that lie ahead for IMA.

The trip was literally an uphill climb, taken with an older colleague and his “thirtysomething” kids. We hiked seven miles on Friday and another 12 on Saturday, carrying 35-pound backpacks that, to say the least, tested my aerobic fitness. The terrain proved steep and strenuous, and my sole consolation was the trail blazes, those reassuring marks on the trees that guide the way. During the hike, I realized something: There was only one way to get to the top--to simply put one foot in front of the other and keep moving forward.

Thinking of those words with respect to IMA, I’m pleased how we--as a Board, as IMA staff, and as members--keep moving forward. One recent example has been our development of social/professional networking sites in recognition of the growing use of this type of technology among our members. A few months ago, we launched two official LinkedIn communities (IMA Official Site and CMA Connection Online: Official IMA Site at www.linkedin.com). Based on the success of these communities, we recently built a custom online social network exclusively for IMA members, LinkUp IMA. That site, which will “go live” to all members during IMA’s 90^th Annual Conference & Exposition in Denver this month, will offer an even more powerful and convenient way for members to exchange ideas, information, and resources.

As these social/professional networking sites prove, the way people communicate is changing--shifting from e-mail to texting, from blogging to tweeting--and, as an organization, IMA is committed to moving with that change. As a mid- or late-career professional, it’s easy to dismiss these newfangled modes of communication. But imagine if we had shrugged off the Internet when it appeared back in the 1980s or ignored Excel because we thought adding machines or calculators were adequate? If we want to meet the needs of our current and future members, we must adapt.

Another way that IMA continues to adapt is our growing emphasis on the global aspects of the profession. As I discussed in last month’s column, my trip to

China

brought home the reality that we have become a truly global organization. That fact is supported by sheer numbers: About 15% of our current members and 60% of our new Certified Management Accountant (CMA®) candidates are from outside the

U.S.

As such, a key component of our mission needs to continue to align with and address the needs of the global profession.

Fortunately, we’ve got a terrific staff and team of volunteers to help us move forward. During our February meeting at IMA’s

Montvale,

N.J.

, headquarters, the Board had the opportunity to meet the entire staff and to witness firsthand the vital role they play in delivering value to our members. All of the staff exuded enthusiasm and commitment that were inspiring.

And inspiration is what we all need--hard work, too--in the months and perhaps years ahead as the global economy continues to churn. In such a climate, education and certification (such as the CMA) become increasingly important, and that’s good news for IMA because it’s a huge part of the value proposition that we offer to each and every member.

And to each and every member, I’d also like to say “thank you” for the privilege of serving as IMA Chair this past year. It has gone by all too quickly. I wish the very best to the Board and to incoming Chair John Brausch, who I know will do an outstanding job.

As always, you can reach me at fschea@imanet.org and invite you to visit my blog at www.fscheablog.com.

May Perspectives Column - Reflections on China

Strategic Finance is the award-winning flagship publication of the Institute of Management Accountants (IMA(R)), Montvale, NJ, www.imanet.org.

Reflections on China

    Sometimes we focus so much on our work in the U.S. that we forget we’re operating in a truly global economy today. Let’s see what we can do to increase the feeling of a worldwide community. 

By Frederick E. Schea, CMA, CFM, CPA

The leadership of the Institute of Management Accountants (IMA®) has long recognized the organization’s mission to act as an advocate for management accounting around the world. Nowhere is this mission more apparent than in the work we’re doing in places like the People’s Republic of China, which I had the good fortune to visit with senior IMA staff last month.

      It was a wonderfully productive trip, made possible because of the groundwork laid by the individuals we’ve recently hired in Beijing. Both Linda Li and Harry Liang, who run IMA’s satellite office there, as well as IMA Director of International Business Development Jim Gurowka, have made tremendous strides in a few short years to help increase IMA’s presence in China. Currently, IMA boasts more than 1,200 members in China--and that number continues to grow almost daily.

      The chance to meet and interact with many of these IMA members at events organized in Shanghai and Beijing provided me with an opportunity to increase my understanding of the needs of our global community.

      The primary focus of our weeklong trip was to spend time with organizations that have helped IMA expand its influence in China and to identify other entities that would like to partner in the future. I’m pleased to report on the progress we made with the five groups we visited: 

     1. Multinational corporations, which operate both in China and in other places around the world. These organizations clearly recognize management accounting as the global language of business and are very supportive of both IMA membership and the Certified Management Accountant (CMA®) certification, which is seen as a way to gain prestige and Western validation of accounting and finance skills.

      2. State-owned enterprises, which represent a tremendous number of accounting and finance professionals--tens of thousands, in fact. They primarily include large corporations that employ accounting or finance staff who are more comfortable working in their native language--usually not English. These individuals have showed great receptivity to taking the Simplified Chinese version of the CMA exam, which IMA introduced in mid-2007.

      3. Privately held companies, including one of China’s largest toy manufacturers, employing some 50,000 individuals. Professionals at these companies were also highly interested in IMA and the CMA, which is perceived as a way to advance their career and equip their finance and accounting staff with the skills necessary to compete in the global marketplace.

      4. Educational institutions, such as the Shanghai University of Finance and Economics (SHUFE), one of the top accounting and finance schools in the country, enrolling more than 40,000 undergraduate and 20,000 graduate students. SHUFE recently joined IMA’s network of review course providers approved to administer the CMA Learning System through live instruction. To help cultivate similar relationships, we also visited with other major universities in Shanghai, Beijing, and Xi’an.

     5. Training companies, which offer technical education in accounting and finance. The individuals we met with were eager to offer CMA educational courses, and, through our visit, we gained two additional training partners.

    My experience in China opened my eyes to two observations about the region. First, it’s easy to imagine that the Chinese economy is distinctly different from that of the U.S., but my time there showed me just the opposite. Everywhere you look in the major cities, you witness the presence of multinational companies--yes, McDonald’s and Starbucks, but also Caterpillar, Microsoft, and Google. Clearly, the U.S.and China share closely aligned economic ties and common interests in the area of commerce.

      Similarly, the notion of “Buy American” struck me clearly as a fallacy. It’s obvious from spending any time abroad in places like China that so much of our global economy is interconnected. Even in my community bank in Pennsylvania, for example, we have customers that source from or sell in the global markets. Rather than subscribe to what is often just a politically motivated mantra, why not seek out and embrace these points of commonality--and find ways to work together? It’s an important lesson for IMA--and for all of us. I welcome your comments at fschea@imanet.org and invite you to visit my blog at www.fscheablog.com.

Strategic Finance is the award-winning flagship publication of the Institute of Management Accountants (IMA(R)), Montvale, NJ, www.imanet.org.

Keeping Things in Perspective

Even though it seems like the world is falling apart, there are still plenty of things financial professionals, particularly management accountants, can do to cope and come out ahead.

By Frederick E. Schea, CMA, CFM, CPA

Reading and watching the news these days can be downright depressing: foreclosures, bankruptcies, what looks like a crumbling financial system. As a long-time member of the banking industry, I wanted to share some thoughts to help put the current situation in a bit more, well, perspective.

While it may appear that all banks are in crisis, that isn’t the reality. What we hear about in the national news mostly relates to large, multinational banks, which make up less than 1% of the total banks in the U.S. Granted, many of these banks are floundering, and their survival has become the focal point for many, including the Federal Reserve Bank and U.S. Congress. That’s as it should be because the top 50 banks control huge amounts of loans and deposits--and provide the bulk of the liquidity for the world’s capital markets.

We all know the news on Wall Street, but what about on Main Street? There, regional and community banks are lending money. At my $1 billion community bank in Upper Bucks County, Pa., for example, we made more loans this past January than we did in the entire fourth quarter of 2008. That’s good news for the many management accountants who don’t work at large multinational companies and are seeking sources of capital.

To tap into this local source of financial support, management accountants should consider the following:

 1. Start an open, honest dialogue with your banker, and provide him or her with accurate, realistic information. That might mean discussing what your company would do if revenues dropped by 10%, 20%, or even 30% and how the bank could support you if that happened. To prepare for that revenue fall-off, devise a contingency plan. We hear about them often in IT, but how about one for your business plan, too?

2. Sharpen your forecasting skills. In the current environment, accurately foreseeing the future is a talent worth cultivating. Along with it goes developing creative solutions that will help ensure the sustainability of your business.

3. Most difficult of all, don’t get hung up on national trends and news. Ask yourself: “How much does the movement of the Dow Jones or S&P 500 really affect my life?” I’d guess that the answer for some is “a lot,” but, for many of us, there’s still cause for gratitude and optimism. More to the point, follow news that relates to your particular geographic location or business segment. The big picture might be grim, but the little one might be considerably better.

Rather than get mired in despair, look at what’s in front of you, and start there. If we ask how we can change the world, it seems insurmountable, impossible. But if we start by looking at how we can change ourselves, the rest will follow.

I welcome your comments at fschea@imanet.org and invite you to visit my blog at www.fscheablog.com.

###

2009 China Trip - Week Two

     Now it is Monday, April 6th and we are having lunch with professors from XI'AN Jiaotong University. Lunch was at a traditional restaurant and really good. We then went to the University for a tour of the campus which was particularly beautiful because of the wonderful warm day and the flowering trees. There was great interest in providing our course materials to allow students to become CMA's. After the seminar, we were able to get an earlier flight to Beijing.

    Tuesday morning we had a meeting regarding XBRL is the Ministry of Finance. Liv Watson and others of XBRL International discussed implementation with the Chinese stock exchanges. While XBRL is mandated for reporting, there are geographical differences in the taxonomies. After the meeting we were invited to lunch at the Ministry of Finance and it was again very good.

    In the afternoon, we headed to a meeting with SASAC to discuss the International Conference to be held in Shanghai in September. We also discussed the possibility of connecting some of the speakers for the event to have a special training session for SASAC.

    For the evening, we had dinner with representatives of SAFEA and Prometrics at a restaurant known for Peking duck. Again, a very excellent dinner. All of the food I was privileged to have in China was very good and I got pretty experienced in the use of chopsticks.

    The next day we had a great meeting with the CFO of SINOCHEM where we discussed the value of building quality in and how the CMA program would be helpful to the management accountants in the organization. We also discussed how XBRL can facilitate internal reporting among diverse units and speed up the closing process. After lunch with one of our training partners, it was off to a signing ceremony and press conference with GEC-ExcellA who will be offering the CMA Learning System to prepare for the CMA examination. After the GEC meeting, we headed to a great member event in Beijing with a number of awards for volunteers who worked hard to promote IMA and management accounting.

    Now it is Thursday and a morning meeting with SINO-Audit which was very productive. They have already reviewed the content of the CMA examination and are favorably inclined to offer the CMA program. We had a quick lunch and headed to BNAI for a seminar and speech about management accounting and the Statements of Management Accounting which are in process of being translated into Chinese. After the seminar, we joined the professors for dinner which was again excellent and very traditional. Professor Ding is a very good proponent of IMA and he was great to sit with and enjoy dinner. Later that evening, Harry and Linda took me to the Bird's Nest which is very beautiful at night along side of the blue cube used for water events during the Olympics. Harry continued with me to "Snack Street" which is very interesting with a wide choice of foods. I sampled a very few.

    Friday is my last day and Harry is kind enough to go with me to the Great Wall, truly one of the great wonders. To think the wall was built by hand is hard to imagine. We climbed about 700 meters vertical distance and the length and breath of the wall is wonderful to see.

    The end of the day was a flight on Continental at about three thirty PM which got me into Newark at 5:30 PM, of course with a twelve hour time difference and a fourteen hour flight.

    My China experience was a very productive and informative to me. Seeing firsthand how advanced China is gave me a much better appreciation for the need for continued cooperation between all of the countries of the globe. Management accounting is so very important to help all businesses throughout the world to thrive and compete in many areas. We must continue our mission of advancing the profession of management accounting to help business in a fast changing world.

2009 China Trip - Week One

I left on March 30th at about 11:20 AM from Newark, NJ on a direct flight to Shanghai. The flight took about 14 hours and I arrived at 1:45 PM in Shanghai on March 31st, with a 12 hour time difference. After settling in at the Shangri-la Hotel I met Linda Li and Harry Liang, our excellent employees in China. Dinner was traditional Chinese and very good.

The next morning, Linda, Harry and I visited with Easy Finance. Easy Finance is one of the best short finance course providers in China with about 10,000 students annually. Easy Finance is a CPE provider for IMA and we discussed further collaborative efforts.

Returning to the hotel, Jim Gurowka arrived from his trip to Saudi Arabia. We then took a tour of the Shangri-la Hotel which is a candidate for our 2009 Global Conference to be held in China.

Dinner was with the Shanghai advisory group where we discussed how we can grow faster in China and what kind of topics they are interested in for the IMA Global Conference.

Thursday, April 2, we went to visit with the Shanghai University of Finance and Economics where we will be cooperating in using the CMA Learning System to help those interested in the CMA credential. We checked in the media and had a formal signing ceremony with SHUFE agreeing to be an ARCP. We had a question and answer session with the media.

From there we went to the Swissotell for site inspection and consideration for the global conference. We then traveled to a Shanghai member event at SHUFE where I gave a talk on the business environment in the United States.

Friday, April 3rd, in the morning with met with representatives of Ingersoll Rand in China to discuss the benefits of IMA and the CMA for the accounting and finance staff of the company. We had very positive discussions.

We checked out of the Shangri-La and headed to the Ritz Carlton which was the last site visit for the potential site for the global conference. After a quick lunch, we toured the Ritz Carlton and met with MCI who will be working with us for the event management of the global conference.

Dinner was at the Park Hyatt on the 91st floor with a representative of Caterpillar. The building is the highest in Shanghai and while it was a bit overcast you could see for quite  a distance.

Saturday, April 4th, we visited the gardens and the Jade Temple. This is a holiday in China called the Sweeping Holiday where Chinese show respect for the deceased.  Later in the day we flew to Xian in the evening.

Sunday, April 5th, we visited the government factory where they make the Terra Cotta Warrior replicas and then to the site where the Terra Cotta Warriors were found. This is a very impressive sight. The emperor had over 7,000 Terra Cotta Warriors created and then buried in underground pits to protect him in the afterlife. We then went to the theatre where we had a traditional dumpling dinner and back to the hotel to get ready for the next week.

"Becoming Visionary Survivors" - Strategic Finance, March 2009

Strategic Finance is the award-winning flagship publication of the Institute

of Management Accountants(IMA®), Montvale, N.J., www.imanet.org. 

Becoming Visionary Survivors

Management accountants are in an excellent position to advise their companies on how to improve financially and successfully prepare for the future and its challenges.

I’ve written a lot recently about what to do when you’re downsized or on the cusp of being cut from your organization. But this month I want to talk about survivors—those left behind when a department, a business unit, or an entire company is whittled down.

Being a survivor is often more difficult than being a casualty. After all, if you lose your job, you know you must find another one. But for those still at a company after the axe has been swung, fear and anger can start to drive everything you do: fear about becoming the next unemployment statistic and anger about why things have happened at all.

It doesn’t have to be that way. Lately I’ve been inspired by John P. Kotter’s book, Sense of Urgency. In it, Kotter posits that, rather than responding to the current economic crisis with inertia or anxiety, we can transform the experience into something positive. That means taking today’s financial reality and converting it into a sense of urgency to create something better: improved processes, reprioritized tasks, reimagined products or services.

Effectively accomplishing this, however, requires a focus on the future—a willingness to look beyond the current situation and see possibilities that others may not. It also requires the ability to prepare for the next level of change that is surely coming rather than wasting time pining for the way things used to be. If the lesson of history has taught us anything, it’s that the only way to move is forward.

What kinds of individuals can offer this kind of visionary change? I believe management accountants sit in a uniquely advantageous position here. With our strong leadership skills and intimate knowledge of the business, we can help prepare our organizations for the challenges that lie ahead, even if it means making unpleasant suggestions that no one wants to hear. We can help generate a sense of urgency, sounding the alarm bell for what must be changed now to ensure survival and success in the future.

To gain this kind of visionary skill takes time and training. One of the best ways I know to acquire it is to become a Certified Management Accountant (CMA®). That certification teaches you to think like a strategic business partner, someone who can effectively foresee what might happen in the future and help guide management through the decisions needed to get there.

CMA or not, however, I firmly believe we management accountants need to get away from our desks and onto the plant floors (or into customer living rooms). We need firsthand involvement in what makes our businesses run so that we can bridge the gap between what happens with our customers and what we need to do to improve financial results. These days, it’s not about analyzing the past—it’s about preparing for the future. Will you join me in becoming one of the visionary survivors?

As always, I welcome your comments at fschea@imanet.org and invite you to visit my blog at www.fscheablog.com. 

February Board Meeting

     Our February board meeting was held on the Friday the 20th in the afternoon and all day on Saturday. On Friday, we focused on board governance issues as a committee of the board. In particular we focused on three questions: What is board diversity? How can we improve board diversity? and How can we be more effective as a board?

     Over the next several months until our next board meeting in June at the Annual Conference we will be putting the thoughts we discussed together into concrete recommendations for board action at our June meeting.

     On Saturday we focused on the activity and direction of our Institute. We reviewed forecasts of our financial health and discussed contingency planning in the context of the current and expected economic difficulty facing all of us. We believe we are well positioned to weather our current economic storm.

    Development of future leaders of the IMA is very important to our future. Our volunteer development committee has great plans to expand our volunteer base and bring more members into the opportunity for service to IMA.

     I look forward to participating on a panel discussion at the CFO Rising Conference in Orlando next week on March 9th. I will write about the questions which are raised in the panel.

     Look for my next column in the March issue of Strategic Finance. I hope you will find it interesting and relevant to situations you may encounter. I will shortly post the column in my blog.

     Last. I just finished John P. Kotter's "A Sense of Urgency". He makes the important observation that a sense of urgency is needed in organizations to fight complacency. I recommend his book for your reading list. Have a great day.

Keeping Our Resolutions - Strategic Finance Magazine

Strategic Finance is the award winning flagship publication of the Institute of Management Accountants, Montvale, NJ, www.imanet.org.

 

Keeping Our Resolutions

By Frederick E. Schea, CMA, CFM, CPA

More than a month has passed since the start of 2009, about the time most of us start slipping on those resolutions we made so fervently when the clock struck midnight on January 1.

Although it isn’t an easy task to keep those promises, I urge us to do so--and to perhaps consider adding some new ones that we might not have considered.

First among them is keeping a positive outlook. With all the discouraging news we’re hearing today, it’s no wonder that we tend to develop a dire attitude about the future, particularly with respect to our organizations. Given that our role as management accountants usually involves analyzing risks and forecasting what’s ahead, it’s tempting in the current economic environment to focus only on trimming budgets or clamping expenses to shore up our resources. But rather than assuming that things will only get worse, why not act from the belief that things will get better--and look for ways to increase revenues or even enhance our customers’ experiences?

Developing a positive attitude can permeate everything we do, including our careers. Making the resolution to continue your education or get certified is a worthy goal. If you’ve already made it, ask yourself if you’ve begun the process. Getting started can be difficult, of course: A complex task such as obtaining an MBA or becoming a Certified Management Accountant (CMA®) appears monumental if glimpsed in its entirety, but when broken down into smaller parts it suddenly becomes possible. So if 2009 is the year you’ve decided to pursue additional education or a certification, try taking a simple first step, such as downloading information or talking with colleagues.

One thing that shouldn’t be hard to start is maintaining an ethical way of doing business. Difficult economic circumstances can prompt our ethical standards to waiver, and that’s a temptation we need to avoid. As management accountants, our ethics must remain spotless and stable across any economic environment, providing an anchor from which to base all our decisions and actions. For IMA members, the IMA Statement of Ethical Professional Practice provides that anchor; reread it early this year, and reaffirm your commitment to it.

Although these professional issues are important, they represent just one aspect of our entire lives. We all know that diversification--that is, not focusing on a single product or product category--is a sound way to reduce investment risk. But diversification also offers a valuable template for life. Don’t spend all your time in any one place: Balance time between work and family, between work and leisure, and between developing new relationships and cultivating old ones.

One great way to diversify your time is to devote more effort to outside activities in your community. Many organizations are struggling right now and may need your particular time and talent. We’ve all heard of the “80/20 rule”—80% of the work is done by 20% of the people. If you’re among the 80% who usually don’t get involved, make 2009 the year you join the 20%. Most likely, you’ll be glad that you did.

With these and your other resolutions, I wish you much success and welcome your comments at fschea@imanet.org. I also invite you to visit my blog at www.fscheablog.com.

Catching Up

     A lot has happened and I have gotten further behind in writing to my blog. Since the board training in August we had a board meeting in Memphis. We changed the format of the board meetings from the past by arranging the board at tables instead of in a large U shape. The idea is to encourage more small group discussion and facilitate more board interaction. I think it worked out pretty good. The board survey indicated general approval of the format and the meeting.

     Many things are underway including a review of our CMA examination and ways to continue to make it more relevant to today's management accountant. We are looking at our investment portfolio as all of you are. We hope 2009 will start to see some improvement in our economy.

     I also was able to attend our Financial Reporting Committee meeting with representatives of the Financial Accounting Standards Board. This is a very active committee which is doing a great job in commenting on standards which impact us as accountants who work inside business.

     Another trip was to the American Accounting Association's conference. Several of our members presented at the conference and we sponsored a breakfast which was well attended by many academics. Before the conference began our Academic Relations Committee met and agreed on the research we would commit funding for. We have a very active group.

     Most recently, I attended with John Brausch and Jeff Thomson, the Association Summit meeting. This year it was hosted by the American Institute of CPA's. Also in attendance were the Institute of Internal Auditors, Financial Executives Institute, the American Accounting Association and the Association of Government Accountants. We discussed a number of items of joint issues and concerns and agreed to consider possible joint activities, especially in research.

     Last, I attended the IMA Senior Leader Team and then the holiday luncheon held in our offices in Montvale. I am always heartened by the dedication of our staff. We have a number of very talented folks who really care for IMA and its members.

     I wish all of you a very happy and healthy New Year.

Board Training

     On Friday and Saturday, August 1 and 2, 2008, the board of IMA met in Anaheim, California for summer board training. On Friday, afternoon, we had a team building exercise by Learn2 called "Saving the Titanic". We all learned a lot about how our behaviors and attitudes can help or hinder our work in future board meetings.

     In the evening, we boarded a bus headed for the home of John Pollara, Chair Emeritus, for dinner. John and Jan were gracious hosts and the hospitality was wonderful as was their house. All who attended had a terrific evening of friendship and conversation. The food was great also.

     Saturday, we had a session in the morning dealing with risk assessment of IMA strategic activities. The session was moderated by Jeff Thomson and Tim Leech. We jointly did exercises designed to improve our risk assessment processes and risk mitigation methodologies.

     Each of our committees met in the afternoon to organize and deal with issues to be presented at the board meeting in September.

     On Sunday, I attended our Foundation for Applied Research, Inc. meeting. We have a very active and committee composed of academics and practitioners who are committed to fostering management accounting research. Our research team is headed by IMA Vice President, Raef Lawson, who is an excellent researcher in his own right.

    Next, I attended several events at the American Accounting Association meeting which runs from Monday to Wednesday. This afternoon at lunch was the awards luncheon for the Management Accounting Section. Tonight we host a dinner for members of the AAA and tomorrow is a breakfast hosted by IMA.

    Then it is back to work for me.